The major impetus for health care reform clearly seems to be the desir
e to contain the cost of health care. One of the major cost-containmen
t methods proposed is capitation. Capitation poses specific problems w
hen applied to mental health services delivery. This article discusses
several of the major issues pertaining to the utility of capitation i
n mental health, discusses on-going capitation efforts, and provides a
n evaluation of capitation programs. Future directions for research on
capitation in mental health are then suggested.